Scams posing as charities
December 31, 2008 by dragon
The Bernie Madoff scam proves that any scam or Ponzi scheme is built on trust. People can't ask too many questions. Madoff passed that test long ago. At the exclusive Palm Beach Country Club – founded by Jews in the 1950s, when the other clubs in town were restricted – he proved himself a person of character by giving hundreds of thousands of dollars to charity each year, a substantial portion of it to Jewish causes.
Madoff enhanced his reputation by showing that since he donates heavily into charities, he must be credible and thus everyone put more money in his fund.
Other more popular types of scams posing as charities thrive from direct solicitations appealing on your pity.
Every time a terrible tragedy strikes, legitimate non-profit organizations will put out a message to supporters asking for financing and other assistance in helping victims. For every real donation that you are able to make which will actually help people, there are countless fake charities which emerge around any number of events. While Internet philanthropy donations are a reasonable way for charities to raise funds, you should also be aware of charity scams.
Make sure that you primarily donate to organizations that you know well – non-profits will established, off line operations and a stellar long, term reputation for delivering quality services to those in need. In addition to specific, cause-oriented charities, you can also donate to umbrella organizations which filter the funds to only legitimate groups who will put your donation to the best use. You can identify these organizations through background research, and can use their on line form to provide a donation.
One set of Internet charity scam are criminals who pose as members of true charity organizations. By seeking to collect donations for these groups, whether through mass phishing emails or pleas for help, these scammers will try to emulate the appearance and behavior of real charities. Instead of clicking on links from emails you get from charities, always use a web search to identify the group’s actual website URL along with their online donation form. With phishing emails, the scam site will attempt to copy the same look and feel as the real site, but actually filter your financial information into a completely different account – this process can turn an act of good to a door open to identity theft.
You should be particularly wary of charities that you have never heard of – if a charity is new, suggest that they join an umbrella group that will be able to professionally evaluate their operations and credentials. Never give you money to a group you aren’t familiar with, no matter how noble the cause may seem – you can always find a real organization that will help address these concerns on the ground.
Charity scams take advantage of human emotional response around natural tragedies, famine, war and other travesties. If your natural response is to help, go with an organization you are confident will actually deliver upon their promises. Make sure to contact the group before you donate to check exactly how your donation will be utilized, and ask for any 3rd party verification of their operations. It’s a good ideal to keep your donations to local, well established groups that you know outside of the Internet so you can personally vouch for their good deeds in the community. This way, you can provide a donation along with lending a hand in actually helping deliver the services you are funding. By harnessing the energy and emotion surrounding disasters to help fix the solution directly, you avoid the potential to be taken by an opportune online charity scam, which all becoming all too common.
What are charity scams?
These scams try to take advantage of your generosity and kindness. They all involve a scammer collecting money by pretending to be a real charity. Not only do these scams cost people money, they also divert much needed donations away from legitimate charities and causes.
Often, the scammer will exploit a recent natural disaster or famine that has been in the news. Other scammers play on people’s emotions by pretending to be from charities that help children who are ill.
Luckily these types of scams are not that common. However you should always be on your guard against fake charities. The scammers can approach you in the street, by coming to your door, over the phone or on the internet.
Warning signs
* You have never heard of the charity before.
* The person who claims to be collecting donations on behalf of the charity approaches you face-to-face and does not have any identification. Remember that even if they do have identification, it could be forged or meaningless.
* The person tries to put pressure on you by making you feel guilty or selfish if you don’t want to give them money.
* The person asking for money cannot or will not give you details about the charity, such as its full name, address or phone number.
* The person gets defensive if you ask any questions about what the charity does and how much of the donation gets taken up by costs.
* The person asks for a cash donation and they don’t want to accept a cheque. Or, they want the cheque to be made out to them rather than to the charity.
* The person doesn’t want to give you a receipt. Or, they give you a receipt that does not have the charity’s details on it.
All this makes charity scams harder to spot. However, here are 10 tips to help spot charity scams:
1. BE WARY of every opportunity that presents itself — especially when it presents itself in the wake of some big disaster that gets lots of media attention.
2. Ask for the name, address, and phone number of the charity — and whether or not it is registered. If the presenters claim that it is registered, get a registration number. The Better Business Bureau Wise Giving Alliance offers information about national charities; you can call 703-276-0100 or go to their website:
==> http://www.give.org
If you're trying to figure out whether or not some particular charity is worthy of support, check out this section of the site:
==> http://www.give.org/reports/index.asp
They publish their standards for rating charities, and then rate over 600 different charities using these standards.
3. Verify with the office of the charity that there is indeed a campaign going on, or that they've authorized the charity drive that you're being invited to contribute to.
4. Don't ever donate cash if you can help it. Write a check to the charity — not to the person standing in front of you. This also helps you document the donation for your records and for your tax return. And don't give out bank information!
5. Ask what percentage of your donation goes directly to the cause. Legitimate charities will have ready answers because they are used to the question. 
6. Get a receipt with the name of the charity on it.
7. Be especially cautious about getting a charity donation request by email. Most legitimate charities don't use email for their solicitations. (Some legitimate charities will email people who have donated before — but never respond to requests where you've never donated.)
8. Be especially wary about charities that claim to be raising funds for the local police or firefighters. Check with them first!
9. Don't give in to pressure or 'guilt trips' about 'suggested donations' or 'requested minimum contributions.' Once you've determined that the charity is legitimate and you've decided you want to contribute, simply give what you can and want to give — it will be appreciated.
10. The best way we know of to avoid charity scams is to decide IN ADVANCE (while you're doing your annual or monthly budget) which charities you'll support and CONTACT THEM. Then you can gracefully turn anyone else down who comes your way with hat in hand.
Protect yourself from charity scams
* Use your common sense: the offer may be a scam.
* If someone comes to your door, ask to see their identification. You do not have to let them in, and they must leave if you ask them to.
* ALWAYS get independent advice if an offer involves significant money, time or commitment.
* Do not agree to offers or deals straight away: tell the person that you are not interested or that you want to get some independent advice before making a decision.
* You can contact your local office of fair trading, ASIC or the ACCC for assistance.
* NEVER send money, or give credit card or online account details to anyone you do not know and trust.
* Do not give out your personal, credit card or online account details over the phone unless you made the call and the phone number came from a trusted source.
* Do not open suspicious or unsolicited emails (spam): delete them.
As well as following these specific tips, find out how to protect yourself from all sorts of other scams.
Do your homework
If you have any doubts at all about the person asking for money, DO NOT give them any cash, credit card or bank account details at all. If you want to make a donation to a worthy cause you should do this in your own time and not in response to a phone call, email or visit.
Legitimate charities are registered at the state or territory level. Call your local fair trading agency to check that the charity that has approached you is genuine. If the charity is genuine and you want to make a donation, get the charity’s contact details from the phone book or a trusted web site. Don’t rely on any phone number or website address given by the person who first called, visited or emailed you because they could be impersonating a legitimate charity. When you contact the charity, check to see if they have any fundraising campaigns taking place in your area.
You should also find out if any donation you make is tax deductible. You can contact the Australian Taxation Office to check.
If the charity is selling raffle tickets, vouchers or other goods make sure you are happy with all the terms and conditions before agreeing.
Decide
If you do not want to donate any money, or you are happy with how much you may have donated to charities already, simply ignore the email or letter, hang up the phone or say no to the person at your door. You do not have to give any money at all.
If you come across a charity or cause that you think is worthwhile, you should do your homework before making any decision. Make sure that the person is who they say they are and that the charity is genuine.
Report them
If you think you have been approached by someone impersonating a legitimate charity, or by a fake charity, you can report a scam through local organizations.
You should also be sure to warn your friends, family, colleagues and neighbours about the scammer.
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